A Cautionary Tale of Venture Capital Financing

The Delaware Chancery Court recently addressed claims by the founder and four other programmers who helped create a successful start-up business.  But, the founder and the other programmers raised funds from venture capitalists who diluted their interests, took control of the board, and left the founder and the key programmers with a paltry $36,000 after the VCs sold the company for $82 million.  The Chancery Court's opinion is cautionary tale for start-ups looking for VC funding -- and a roadmap for claims that might be brought against overly voracious VCs.  It is worth a read (http://courts.delaware.gov/opinions/download.aspx?ID=186730).